Sian v Halimedia: Insolvency vs Arbitration – Article by Ernest Leung cited in recent Privy Council decision – Wilberforce Chambers
‘In Sian Participation Corp v Halimedia International Ltd [2024] UKPC 16, Lords Briggs and Hamblen considered the issue of whether insolvency proceedings should be stayed where the underlying debt was covered by an arbitration agreement. In an appeal from the BVI, the Privy Council rejected the approach in Salford Estates (No 2) Ltd v Altomart Ltd (No 2) [2014] EWCA Civ 1575 where the English Court of Appeal stated that insolvency proceedings should be stayed in favour of arbitration proceedings unless there are exceptional circumstances (“the Salford Approach”). This means that even if the debtor company could not show that the debt is genuinely disputed on substantial grounds (a relatively low threshold), the petitioning creditor will still have to go through the arbitration process to establish the debt before seeking a winding-up order.’
Wilberforce Chambers, 21st June 2024
Source: www.wilberforce.co.uk
